EZ-K

EZ-K is a powerful tool that can help owner-only companies maximize their benefits. As a result of Pension Legislation passed in the summer of 2001(EGTRRA), enhanced contributions and benefits are now available.

One of the most exciting enhancements is for Owner-Only Businesses.  Effective January 1, 2002, business owners with no employees can establish a 401(k) plan and contribute considerably more than would have been possible in prior years. See qualification rules here.

The examples shown here reflect comparisons of "EZ-K" to several plan types at various W-2 Wage levels for 2005:

Name(s)

W-2 Wages
"EZ-K"

Profit Sharing/
Money Purchase

SEP

Simple IRA

Contribution

Deferral

Contribution

Deferral

Owner

$25,000

$6,250

$15,500

$6,250

$6,250

$750

$10,500

Owner

$50,000

$12,500

$15,500

$12,500

$12,500

$1,500

$10,500

Owner

$75,000

$18,750

$15,500

$18,750

$18,750

$2,250

$10,500

Owner

$100,000

$25,000

$15,500

$25,000

$25,000

$3,000

$10,500

Owner

$125,000

$30,500

$15,500

$31,250

$31,250

$3,750

$10,500

Owner

$150,000

$30,500

$15,500

$37,500

$37,500

$4,500

$10,500

*Please note that these calculations assume the business is incorporated (S or C) and the compensation is W-2 Wages. Self-employed individuals or partners must have enough net earned income to support the level of contribution desired. If the business owner is age 50 or older, add $5,000.00 to each EZ-K total and $2,500.00 to each simple IRA total.

Establishing an EZ-K is as simple as the name implies. Complete the Census, EZ-K Outline and Service Agreement then mail the forms with a check for $2,200 ($1,100 installation & 1st year administration - $1,100) To:

TSC
ATTN: Marketing
7300 Metro Blvd., Suite 450
Edina, MN 55439

The plan document should be signed before 401(k) contributions begin, so we will expedite shipment if all is in order. Sample enrollment and beneficiary forms are below:

Sample Participant Enrollment Form - Microsoft Word format (.doc)

Sample Participant Beneficiary Designation Form - Microsoft Word format (.doc)